| March 4, 2011

Interstate compact holds promise for states

A measure currently making its way through the Oklahoma Senate would authorize the state to enter into an “interstate compact” with other states to regulate health care without interference from the federal government. The measure, Senate Bill 722 by state Sen. Clark Jolley, recently passed out of the Senate Rules Committee and will now receive a hearing on the Senate floor.

The idea of using interstate compacts as a way to push back against federal encroachment into traditional areas of state regulation – such as insurance and health care – is gaining a lot of momentum throughout the nation. The notion is a welcomed step in the right direction, but there are valid concerns about how feasible such an approach would be in the area of healthcare.

Interstate compacts are authorized by Article 1, Section 10 of the United States Constitution and essentially create the force of federal law once consented to by Congress. “Consent” is the operative word here. There is a split of opinion among supporters of interstate compacts about whether consent requires presentment to and the signature of the President.

Andrew Spiropoulos, a constitutional law professor who serves as the Milton Friedman Distinguished Fellow at OCPA and who supports the health care compact idea, believes consent requires presidential approval – which, under the current administration, is a long shot at best. Others, notably our friends at Arizona’s esteemed Goldwater Institute, believe congressional consent (and therefore presidential approval) is not even necessary when the compact, as the Supreme Court ruled in U.S. Steel v. Multistate Tax Commission (1978), seeks only to enhance “states’ power [relative] to the federal government.” In other words, an interstate compact that only seeks to enhance state power in areas of traditional state regulation (such as healthcare) rather than supersede federal power, does not require congressional approval.

Regardless, interstate compacts hold tremendous promise and are likely to become the primary avenue in areas from healthcare to property rights for legislators hoping to wrest traditional state power back from the federal government in the coming years.

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